Multiple Choice
According to the equation of exchange, if velocity and real GDP do not change, a 3 percent increase in the quantity of money
A) raises the price level by 3 percent.
B) raises the price level by 3 ÷ (velocity) .
C) lowers the price level by 3 ÷ (real GDP) .
D) lowers the price level by 3 percent.
E) raises the price level by less than 3 percent.
Correct Answer:
Verified
Correct Answer:
Verified
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